$4.92 mil loss at Orchard Scotts

THE top two losses for private non-landed homes sold in the week of Feb 14 to 21 were for units in Orchard Scotts, a 99-year leasehold ­condominium in prime District 9 completed in 2008. It comprises 387 units and is located within walking distance of the Newton MRT station.

On Feb 15, a 2,336 sq ft unit at ­Orchard Scotts was sold at a $4.92 million, or 58% loss, inclusive of ­Seller’s Stamp Duty. The seller bought it for $8.46 million, or $3,620 psf, in Octo­ber 2013 and sold it for $3.68 million, or $1,575 psf. He was also liable for a $147,200, or 4%, SSD. The $4.78 million loss, excluding SSD, works out to 56%, or 22% a year over 3.3 years.

A day earlier, a 2,282 sq ft unit at Orchard Scotts was sold at a $675,000 loss. The loss works out to 17% or 2% a year over 10 years. The seller bought the unit from the developer for $4 million, or $1,753 psf, in January 2007 and sold it for $3.33 million, or $1,457 psf.

There were six rental contracts for units of 2,200 to 2,300 sq ft at ­Orchard Scotts in 2H2016, with monthly rents averaging $9,458. This ­implies a 3% gross rental yield for the 2,282 sq ft unit.

The Feb 15 transaction marked the biggest loss at Orchard Scotts so far. Prices for the project peaked in 2008, when nine units were transacted at an average of $2,503 psf. The four transactions at Orchard Scotts so far this year averaged $1,447 psf. Based on the matching of URA caveat data, all 10 units transacted at Orchard Scotts since 2015 have ­suffered losses, ranging from $150,000 to $4.78 million. The average loss was $1.68 million, or 32%.

Rents at Orchard Scotts have also fallen sharply. From the recent peak of $12,349 in 2014, average monthly rent for units of 2,200 to 2,500 sq ft declined by 11% y-o-y to $11,025 in 2015. In 2016, the average monthly rent for units of this size range fell another 9% y-o-y to $10,035.

For private non-landed homes sold in the week of Feb 14 to 21, the biggest profit of $955,000 was made by the seller of a 1,765 sq ft unit at The Anchorage. The seller bought the unit for $1.05 million, or $592 psf, in June 2002 and sold it for $2 million, or $1,133 psf. The gain works out to 91%, or 5% a year over almost 15 years. This unit fetched a $17,000 or 2% profit the last time it changed hands in 2002. The previous seller bought it for $1.03 million, or $582 psf, in a sub-sale in March 1995.

There were seven rental contracts for units of 1,700 to 1,800 sq ft at The Anchorage in 2H2016, with ­monthly rents averaging $4,186. This implies a 3% gross rental yield for the recently transacted 1,765 sq ft unit. Based on the matching of URA caveat data, there have been 112 profitable transactions and no unprofitable transaction at The Anchorage since 2010. All four units sold so far this year have netted profits for their sellers, with transacted prices ranging from $1,133 to $1,194 psf.

The Anchorage is a freehold ­condo completed in 1997. It comprises 775 units and is located adjacent to Anchorpoint Shopping Centre, and across the road from Queensway Shopping Centre.

This article first appeared in The Edge Property Singapore, a pullout of The Edge Singapore, on March 6, 2017.

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